Boston, MA -- (SBWIRE) -- 08/29/2012 -- BMI View: While we remain optimistic about South Africa's longer-term commercial potential from the point of view of innovative drugmakers, a number of obstacles will remain. Private healthcare facilities remain out of reach for the vast majority of the population, while public health programmes continue to suffer from budgetary shortcomings. Moves in the right direction have been made with the creation of the National Health Insurance (NHI) scheme, with pilot programmes rolled out in April, although its implementation is not expected this decade.
Headline Expenditure Projections
- Pharmaceuticals: ZAR27.19bn (US$3.74bn) in 2011 to ZAR29.73bn (US$3.72bn) in 2012; +9.3% in local currency and -0.7% in US dollar terms. Forecast largely unchanged from Q212.
- Healthcare: ZAR261.51bn (US$36.01bn) in 2011 to ZAR285.59bn (US$35.70bn) in 2012; +9.2% in local currency terms and -0.9% in US dollar terms. Forecast broadly unchanged from Q212.
- Medical devices: ZAR11.43bn (US$1.57bn) in 2011 to ZAR12.26bn (US$1.53bn) in 2012; +7.3% in local currency terms and -2.6% in US dollar terms. Forecast broadly unchanged since Q212.
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Risk/Reward Rating: In our latest Pharmaceutical Risk/Reward Ratings (RRRs) for the Middle East and Africa (MEA), South Africa has the same composite score as in Q212 of 55.5 out of 100. However, the country now ranks sixth, down by one position since the previous quarter, because of the improvement of Saudi Arabia's score. Globally, South Africa is 36th out of 95 countries surveyed, with its risks variable still judged more favourable than its longer-term rewards.
Key Trends And Developments
- Despite improvements in the past, pharmaceutical firms in South Africa continue to lose business due to delays in receiving regulatory approval for new drugs. According to Business Day reports in April, Adcock Ingram had 656 dossiers awaiting approval. About 66% have been pending with the Medicines Control Council (MCC) for more than two years, CEO Jonathan Louw said. Cipla Medpro CEO Jerome Smith said the inability to get new suppliers of active pharmaceutical ingredients (APIs) due to delays cost the firm at least ZAR15mn (US$1.45mn) in 2011. In response, Mandisa Hela, the registrar of the MCC, said around 1,500 applications, mainly generic medicines, were pending approval.
- The MCC takes as long as five years to get medicines available in pharmacies. In order to get the necessary medicines available to patients without such massive delays, in April the MCC was asked to consider the compassionate use of a novel drug, TMC207, on an urgent basis.
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